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BUDGET 2017: Duty on fuel and booze frozen but bad news for smokers

Written by: Paloma Kubiak
In the much-anticipated first Autumn Budget, Philip Hammond announced duties on recreational goods and services such as fuel, alcohol and the majority of flights will be frozen. But tobacco duty will rise.

The Chancellor announced the government will cancel the expected fuel duty rise for the eighth year in a row, saving drivers an average £160 a year. It will remain at 57.95p per litre for both petrol and diesel.

Hammond added that since 2010, the average car driver has saved £850, while the average van driver has saved over £2,100, at a cost of £46bn to the Exchequer.

Turning to alcohol, the Chancellor also confirmed the duty on beer, wine, cider and spirits will be frozen.

This means the cost of a pint of beer or cider will be 1p lower than if duty had risen by inflation while the cost of a typical bottle of wine will be 6p cheaper. But Hammond noted that “excessive alcohol consumption by the most vulnerable people is all too often through cheap, high strength, low quality products – especially so-called white ciders”. As a result, cheap, high-strength cider (between 6.9% and 7.5% alcohol) will be subject to a new band of duty from 1 February 2019.

For those who smoke, the cost of doing so will rise. Hammond confirmed duty on cigarettes will increase by 2% above inflation while hand-rolling tobacco duty will increase by 3% above inflation. This comes into effect from 6pm tonight and will add £45m to the Exchequer’s revenue in 2017/18.

Referencing Lewis Hamilton and his £3m VAT saving on his private jet, Hammond said air passenger duty (APD) will be frozen for all economy passengers and all short-haul flights. The standard rate will increase by £16 and the higher rate will increase by £47.

“It will rise for premium fares on long-haul flights, and on private jets. Sorry Lewis”, Hammond said.

The APD changes take effect from April 2019.

APD rates

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